AirAsia reports RM1.07 billion profit for 2010

AirAsia Berhad has reported a milestone billion-ringgit profit-after-tax in 2010, in what Group CEO Tony Fernandes hailed as a “phenomenal achievement”.

“Not only did we achieve record profits, but also breached the billion-ringgit mark in net profit,” Fernandes declared. “With strong cash balances of RM1.50 billion, our gearing levels decreased to 1.75 times as compared to 2.57 times a year ago. The company is in the best position, financially, that it has ever been in – providing a strong foundation for further expansion and growth in 2011.”

The year-round performance was boosted by a fourth-quarter which also included several new records for AirAsia: revenue of RM1.19 billion; profit after tax of RM316.55 million; load factor of 82% (up from 79% year-on-year); revenue/ASK up 21% (y-o-y) for Malaysian AirAsia (MAA), up 12% for Thai AirAsia (TAA) and 22% for Indonesian AirAsia (IAA); and average fare up 7% for MAA, 6% for TAA and 16% for IAA all in their respective currencies. Despite rise in fuel cost, EBITDAR margins for MAA rose by 6 percentage points y-o-y to 49.3%.

Fernandes emphasised the increased contribution from ancillary income to the company’s bottom line, matching the company’s passenger growth. “Ancillary has been a tremendous revenue stream for us. It’s up in all three of our operations: MAA at RM49 per passenger (up 99% from RM25 y-o-y); TAA, at THB369 per passenger (up 109% from THB176 y-o-y); IAA at IDR155,089 per passenger (up 108% from IDR74,495).”

Fernandes also highlighted the fourth-quarter performances of TAA and IAA. On TAA, he noted that TAA generated revenue of THB3,744 million, recording 29% growth year-on-year; Profit after tax was also up by 364% y-o-y. Ancillary income per passenger spent in Thailand increased by 109%. By the end of 2010, TAA had a fleet of 19 Airbus A320s and will add four aircraft in 2011.

IAA posted a 38% rise in revenue of IDR795,750 million, with ancillary revenue growing by 108%. Load factor was at 78% (up from 74% y-o-y). This translated into its Profit After Tax rising 214% to IDR166,634 million.

Fernandes said the performance by the two affiliates boded well for their potential listing in 2011 on the Bangkok and Jakarta stock exchanges (TAA and IAA respectively). “The results speak for themselves. They confirm that we are on the right track in terms of our strategy in both Thailand and Indonesia,” he said.